Mercer has today welcomed the announcement by the Federal Government of proposed legislation that would increase level of independence on superannuation trustee boards.
Mercer sees this proposed reform as a way of bringing broader skills and experience and greater diversity to trustee boards.
Pam McAlister, Partner in Mercer’s Governance Practice Solutions business, said “While strengthening the independence of superannuation boards is important, we believe that the collective skillset, objective judgment and dynamics of a board are just as important to effective decision-making.
“We therefore see the proposed legislation as an opportunity to enhance the composition of trustee boards in a way that is best suited to each individual fund.”
Ms McAlister added: “As our research report shows, a move towards independent directors is reflected by overseas experience.
“It is hard to argue against the mandating of independent directors in Australia given that superannuation funds are significant financial businesses. Trustee boards are responsible for the nation’s retirement savings and should therefore be held to the same governance standards applicable to Australian-listed companies, banks, life insurers and general insurers.
“Mercer also commends the flexibility in the Government’s proposed approach, which would allow for member representation on trustee boards to continue.”
A copy of Mercer’s recent report on Superannuation Fund Governance can be downloaded here.
Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s more than 20,000 employees are based in more than 40 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy and people. With 57,000 employees worldwide and annual revenue exceeding $13 billion, Marsh & McLennan Companies is also the parent company of Marsh, a leader in insurance broking and risk management; Guy Carpenter, a leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a leader in management consulting. For more information, visit www.mercer.com.au Follow Mercer on Twitter @MercerAU.